FOR IMMEDIATE RELEASE
2009-131

Washington, D.C., June 9, 2009 — The Securities and Exchange Commission today charged two California men and two companies they control for conducting an $80 million Ponzi scheme that targeted Korean-American investors with false promises of extraordinarily high returns from foreign currency (forex) trading.

The SEC alleges that Peter C. Son, of Danville, Calif., and Jin K. Chung, of Los Altos, Calif., lured approximately 500 investors in the United States, South Korea, and Taiwan into their investment scheme in which funds were not traded in the forex market as claimed, but instead used to pay cash "returns" to certain investors in Ponzi-like fashion. They also misappropriated investor money for their own personal use, including mortgage payments on Son's multi-million dollar home. The SEC is seeking an emergency court order to freeze the defendants' assets.

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"Son and Chung portrayed themselves and their companies as highly successful in the forex industry, while in reality the tremendous forex trading profits they claimed did not exist," said Marc Fagel, Director of the SEC's San Francisco Regional Office. "They placed ads in Korean-language newspapers and used sales agents to target Korean-Americans in typical affinity fraud fashion as they preyed on the trust within close-knit communities."

According to the SEC's complaint, filed in federal district court in San Francisco, Son and Chung operated their scheme through SNC Asset Management, Inc. (SNCA) and SNC Investments, Inc. (SNCI), which maintained offices in Pleasanton, Calif., and New York City. Son and Chung promised investors spectacular annual returns of up to 36 percent from forex trading, and told investors that SNCA had generated 50 percent profits from such trading each year since 2003.

The SEC alleges that Son and Chung faked SNCA's supposed forex trading profits, providing investors with monthly account statements showing fictitious returns. Son and Chung drained SNCA's and SNCI's bank accounts as their Ponzi scheme was collapsing and transferred investor funds to accounts they controlled overseas. In addition to paying Son's mortgage, investor funds were used to provide capital infusions to SNCI and pay Son's wife a salary for which she did no work.

Among other emergency relief for investors, the SEC seeks court orders prohibiting the defendants from engaging in future violations of the antifraud provisions of the federal securities laws; freezing their assets and compelling them to return overseas assets to the U.S.; and requiring them to disgorge their ill-gotten gains and pay financial penalties.

Son appeared in federal court in Oakland, Calif., yesterday on federal criminal charges. Separately today, the Commodity Futures Trading Commission announced civil fraud charges against Son, Chung, SNCA, and SNCI.

The SEC acknowledges the assistance of the Federal Bureau of Investigation, the U.S. Attorney's Office for the Northern District of California, the Commodity Futures Trading Commission, and the National Futures Association.